Dothan Man Sentenced to Three Years in Prison for Embezzlement

MONTGOMERY, AL—James E. Goldsborough, age 71, was sentenced by U.S. District
Judge W. Keith Watkins to 36 months in federal prison for embezzling funds from PeoplesSouth
Bank (PSB), U.S. Attorney Leura G. Canary announced today.

On July 19, 2010, Goldsborough pleaded guilty to a one-count felony information
charging him with embezzlement of funds by a bank employee, in violation of Title 18, United
States Code, Section 656. According to court records, Goldsborough worked for PSB in Dothan
since 1992—first as president and, later, executive vice president. In these positions,
Goldsborough had the authority to approve loans up to $25,000.

Goldsborough began embezzling in approximately 1992. He accomplished this by
opening a bank account in the name of the fictitious entity. He would then approve loans to
fictitious borrowers in amounts of $25,000 or less, deposit the loan proceeds in the account, and
use the money either for personal expenses or to repay previously obtained fraudulent loans.
Goldsborough would occasionally receive the loan proceeds in cash, falsely representing to the
teller that he intended to personally deliver the funds to the borrower. Goldsborough classified
the loans as commercial loans because there was no minimum monthly payment—the only
requirement was that the loan be paid in full when due. When a loan would become due,
Goldsborough would arrange for a new fictitious loan and use those funds to pay the loan that
was due. Goldsborough also used his knowledge of PSB’s security procedures to avoid certain
anti-fraud measures.

At the time Goldsborough's embezzlement scheme was detected in August 2009, PSB’s
records show that approximately 92 fictitious loans were outstanding with a total principal
balance of approximately $1,850,999.23.

The case was investigated by the Federal Bureau of Investigation and was prosecuted by
Assistant U.S. Attorney Andrew O. Schiff.